Water rights are property rights associated with, but not integrally tied to, a parcel of land and vary depending on the location and jurisdiction where the right is located. For example, much of the eastern United States follows a Riparian water rights model wherein land owners with property located adjacent to a body of water have the right to make reasonable use thereof. During a water shortage, a land owner's water allotment is a function of the property's frontage to the water source. Riparian water rights are therefore conveyed with the land.
In contrast, the scarcity of water in the western United States, such as Colorado and other western states, spurred the development of a “prior appropriation” water right model. In a prior appropriation water right model the land owner enjoys a right to apply water to a “beneficial use” subject to a decree. Under a prior appropriation water model, the first person to take a quantity of water from a water source for a “beneficial use,” such as agricultural irrigation, has the right to continue to consume that quantity of water for that defined purpose indefinitely. Junior users can use the remainder of water available from a particular water source so long a-s they do not infringe on a senior user's rights. Each individual's water right is associated with a historical yearly quantity of water that was beneficially used and an appropriation date that defines the seniority of their right. In some jurisdictions, if one does not apply his or her water allotment to a beneficial use over a predetermined period of time, the water right may lapse and a junior water rights holder may petition an appropriate governing body for ownership of the non-used portion of the senior user's water right. Thus, water rights owners may lose valuable water rights if they implement strategies to conserve their consumptive water usage.
However, water rights under the prior appropriation model are not always connected to the land and can in some circumstances be transferred similar to real property. Indeed, some prior appropriation jurisdictions allow water right holders to sell, or otherwise convey all or a portion of their consumptive use water right to a third party. In these situations, the proceeds of the water right sale can be used to offset the costs of conservation efforts, which may include loss of crop revenue, decreased crop yield, legal and engineering transaction fees, monitoring instrumentation, flow measurement, and jurisdictional reporting. More specifically, the water right holder is able to trade his/her previously-defined water right in a “water market” or “water bank” to a willing buyer. In practice, a water court, or other administrative body, assesses historical water usage data associated with a parcel of land, defines and quantifies the total water appropriation amount for that parcel of land, and approves the amount of water that may be sold to a third party.
As one might imagine, many water right holders are interested in conserving their water and monetizing some portion of their water right (see FIG. 1) for economic benefit. However, there is no systematic method or system that identifies individual elements of a water right so that the total amount of water that may be conserved can be estimated. Also, no tool exists that allows the water right holder to estimate the economic impact of a proposed water conservation effort and allows them to streamline the bureaucratic process associated with reporting water use to facilitate a sale or lease of water.
Thus there is a long-held need to provide a system that optimizes agricultural land and water use and facilitates water conservation by allowing a holder of a water right to assess actual water usage and compare such quantity with the historical water usage allotment, wherein the difference between the actual use (actual consumptive use plus historical return flow obligations) and the historical use (historical consumptive use and historical return flow obligations) would be available for trade, sale, or lease. One embodiment of a system contemplated by the present invention is sometimes referred to herein as SWIM® or Sustainable Water and Innovative Irrigation Management®.